OpenAI Completes Corporate Reorganization with Microsoft's Support
In a significant development, OpenAI has completed its long-awaited reorganization into a public benefit corporation (PBC), marking a major milestone in the company's journey. According to Bret Taylor, chair of the board of directors, this transformation would not have been possible without the support and acquiescence of Microsoft.
As part of the reorganization, OpenAI's nonprofit arm, now dubbed the OpenAI Foundation, will retain control over its for-profit division and hold an equity stake valued at approximately $130 billion. Notably, the Foundation's stake in the company is expected to increase as it reaches a predetermined "valuation milestone," granting it further control over the for-profit.
Microsoft played a pivotal role in facilitating this transition, agreeing to reduce its stake from 32 percent to 27 percent in OpenAI's for-profit unit, which now stands at an estimated $500 billion. This deal was made possible through a memorandum of understanding between the two companies, signaling a significant shift in their relationship.
The agreement includes several key provisions, including Microsoft holding intellectual property (IP) rights to OpenAI's models and products until 2032, covering systems developed after declaring artificial general intelligence (AGI). However, this IP waiver applies only to consumer hardware, not systems developed post-AGI. In return, OpenAI has pledged to spend $250 billion on Azure cloud computing services.
Perhaps most notably, the partnership allows for an independent panel of experts to verify any claims made by OpenAI regarding AGI, should it reach that milestone. Moreover, Microsoft will no longer have a "right of first refusal" to be OpenAI's cloud provider, removing a significant burden from their relationship.
The successful completion of this reorganization paves the way for OpenAI to become a publicly traded company, alleviating concerns about its financial future and providing clarity on its path forward.
In a significant development, OpenAI has completed its long-awaited reorganization into a public benefit corporation (PBC), marking a major milestone in the company's journey. According to Bret Taylor, chair of the board of directors, this transformation would not have been possible without the support and acquiescence of Microsoft.
As part of the reorganization, OpenAI's nonprofit arm, now dubbed the OpenAI Foundation, will retain control over its for-profit division and hold an equity stake valued at approximately $130 billion. Notably, the Foundation's stake in the company is expected to increase as it reaches a predetermined "valuation milestone," granting it further control over the for-profit.
Microsoft played a pivotal role in facilitating this transition, agreeing to reduce its stake from 32 percent to 27 percent in OpenAI's for-profit unit, which now stands at an estimated $500 billion. This deal was made possible through a memorandum of understanding between the two companies, signaling a significant shift in their relationship.
The agreement includes several key provisions, including Microsoft holding intellectual property (IP) rights to OpenAI's models and products until 2032, covering systems developed after declaring artificial general intelligence (AGI). However, this IP waiver applies only to consumer hardware, not systems developed post-AGI. In return, OpenAI has pledged to spend $250 billion on Azure cloud computing services.
Perhaps most notably, the partnership allows for an independent panel of experts to verify any claims made by OpenAI regarding AGI, should it reach that milestone. Moreover, Microsoft will no longer have a "right of first refusal" to be OpenAI's cloud provider, removing a significant burden from their relationship.
The successful completion of this reorganization paves the way for OpenAI to become a publicly traded company, alleviating concerns about its financial future and providing clarity on its path forward.
. And $250 billion for Azure? That's a whole lotta cloud computing power! But, on the bright side, it's gonna be interesting to see how they manage all that AGI verification process 
. Don't get me wrong, I'm stoked for the future of AI, but we gotta keep an eye on things...
just thinkin' about this whole thing is mind blowin'... so microsoft's support is literally what made it possible for openai to become a pbc? that's wild 
i mean, who would've thought they'd be best buds with the company behind chatgpt? 
and now openai's basically just a shell of its former self, all because they needed microsoft's handouts 
i don't know man, it feels like they're losin' their identity in this deal... what's left for them to do besides churn out more models and cash in on the agi hype? 
I've been following OpenAI's journey for years and it's crazy how far they've come! The fact that Microsoft is supporting them through this reorganization is huge 
! This is gonna be HUGE for AI research & development 
. With Microsoft's support, they're able to keep their non-profit arm in the driver's seat while still getting access to major funding & resources 
. The whole AGI thing has me excited too - it's like, what even is that? 
I'm curious to see how this all plays out and if we'll actually get to a point where AI surpasses human intelligence 
they're finally getting their act together and becoming more transparent about their AGI plans. i know some ppl are worried about microsoft's involvement, but let's be real, this partnership is a win-win for both companies 
bret taylor seems like a smart dude who knows how to navigate the complex world of AI & biz dev. it's cool that openai is getting more control over its own destiny and can finally focus on developing AGI without all the drama